Manulife Closes on New York Life Deal, Growing Retirement Plan Assets 60%
April 17, 2015 by Marie Suszynski, Best's News Service correspondent
TORONTO – Manulife Financial Corp.’s U.S. division, John Hancock Financial, has completed its acquisition of New York Life’s retirement plan services business.
The transaction, along with Manulife’s buy of Standard Life’s Canadian operations, significantly increases John Hancock’s retirement plan assets under administration.
“Manulife is a major player in the pensions business in Canada, the United States, Hong Kong and Indonesia,” Donald Guloien, president and chief executive officer, said in a statement. “These transactions accelerate our strategy to grow our wealth and asset management business around the world.”
U.K.-based financial services group Standard Life plc sold its Canadian business to Manulife in February for C$4 billion (US$3.67 billion) (Best’s News Service, Feb. 2, 2015).
John Hancock’s retirement plan assets under administration rose 60% as a result of the New York Life acquisition to $135 billion. The business has 55,000 retirement plans and 2.5 million plan participants.
The acquisition also strengthens Manulife’s presence in the mid-case and large-case retirement plan markets in the United States, while building on its leading position in the small-case market, Manulife said.
New York Life’s 450 employees in retirement plan services will join John Hancock. Peter Gordon, CEO of John Hancock Retirement Plan Services, will oversee the business.
In another transaction related to the deal, New York Life agreed to assume a portion of John Hancock life insurance policies. That transaction is expected to close later this year, Manulife said.
Under that deal, New York Life agreed to assume, by way of reinsurance, 60% of John Hancock’s in-force participating life insurance closed block, which was written prior to John Hancock’s demutualization in 2000.
The block of 1.3 million policies was closed in connection with John Hancock’s demutualization in 2000 and includes more than $11 billion in liabilities. Through the reinsurance arrangement, New York Life will assume $7 billion of those liabilities. The policies have a face amount of more than $25 billion (Best’s News Service, Dec. 23, 2014).
Based in Canada, Manulife is a financial services group that operates as John Hancock in the United States and Manulife in other parts of the world.
John Hancock Life & Health Insurance Co. has a current Best’s Financial Strength Rating of A+ (Superior). New York Life is currently rated A++ (Superior).